Skipton ups rate on two-year fixed-rate Isa
The minimum opening balance is £500, but deposits of up to the 2014/15 tax year personal allowance of £5,940 can be made.
From 1 July, when the account will automatically become a 'New Isa', or Nisa, the limit will increase to £15,000.
Transfers in from other Isas are allowed and savers will be able to close the account and withdraw the full amount during the two-year term but a penalty of 180 days' loss of interest applies. Partial withdrawals and transfers out are not permitted.
While any improvement in rate is good news for savers, this two-year fixed Isa is still some way behind the accounts sitting at the top of the best buy tables. TSB's version is paying 2.1%, while Halifax, Nationwide and Cheshire's pay 2.05% and all four accept transfers in.
Meanwhile, Skipton also confirmed it would hold the interest paid on its market-leading five-year fixed-rate Isa at 3%.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.